Long Islanders living in storm-damaged co-ops say restrictions on insurance coverage and federal disaster aid have left them without enough money for repairs.

Legislators are pushing the Federal Emergency Management Agency to give more help to co-op owners. But as federal rules stand, the problem amounts to a one-two-three wallop that some residents fear could force them from their homes.

Residents typically cannot buy flood insurance to fully cover items such as cabinets, major appliances and floors because of the legal structure of co-ops, where residents do not own their living space.

Common property -- such as electrical systems, boilers and elevators -- is generally insured for much less than its value because the federal government sets low limits on flood coverage for co-op buildings.

The result: Any common property repairs not covered by insurance or grants may need to be covered out of co-ops' capital funds or through extra charges -- "assessments" -- imposed on residents, on top of the cost of repairing their own units.

"If they're going to assess me $500 a month, I can't stay there, I don't have it," said Renée Palermo, 45, a New York City teacher whose town house at the Anchorage co-op complex in Freeport was flooded by superstorm Sandy.

Insurance shortcomings

FEMA, which administers the National Flood Insurance Program, the nation's primary flood insurance provider, acknowledges that co-ops could face significant financial shortfalls. If a co-op building valued at $10 million were declared a total loss after a natural disaster, and had the maximum $250,000 in flood insurance, "there would be a huge exposure there that would not be covered," an agency spokesman said. But the federal law governing the flood insurance program imposes the limits, the spokesman said.

This shortcoming in flood insurance could pose problems for growing numbers of Long Islanders in the future. The region is home to about 64,000 co-ops and condos, according to state Attorney General Eric Schneiderman, who regulates the complexes. Planners expect more such complexes will be built for young people and downsizing senior citizens.

"It's important for the economic future of Long Island that these properties that have been damaged are able to be restored," said Richard Guardino, executive dean of the Breslin Center for Real Estate Studies at Hofstra University.

Homeowner insurance does not cover flooding. The National Flood Insurance Program allows a single-family homeowner to buy as much as $250,000 in flood insurance for a house, plus $100,000 to cover furniture, clothes and other contents.

The rules are different for co-op owners, though. Since they own "shares" in the complex instead of owning their living space outright, they typically cannot insure items such as cabinets, major appliances and floors, according to FEMA.

The corporation that oversees a co-op complex can buy flood insurance to cover common property such as boilers and electrical systems. Theoretically, that insurance also could cover the fixtures inside each co-op unit. However, the federal government will only allow the complex to buy $250,000 in coverage for each building, even if it contains hundreds of units.

Replacing a boiler for a high-rise can cost almost $250,000, said Fred Brandenberger, a senior property manager at TRC Property Management in Long Beach, which manages more than 20 co-op and condo complexes.

"It's really a limited coverage, it's not insuring the building to value at all," said Denis Miller, a Long Beach insurance agent.

Flood coverage above $250,000 is available from private insurers like Lloyd's of London. But the price is exorbitant, Brandenberger said.

The gap between insurance coverage and the cost of rebuilding has left many co-op residents feeling desperate.

At the Anchorage, residents are still waiting to find out how much it will cost to repair common property. Many are frustrated about the lack of information, Palermo said.

The board president, Marie Gianaca, said the complex had the maximum $4 million in federal flood insurance for its 16 buildings. That won't cover all repairs. It's still unclear what the gap will be, she said: "It could be $500,000, it could be $1 million."

Residents left in lurch

At the 160-unit Town N Harbor co-op complex in Freeport, it will cost more than $4.6 million to repair storm damage, according to a Feb. 1 letter to residents from the complex's board of directors. Residents will need to pay $800,000 for repairs to common property; the board also is seeking to refinance the complex's mortgage, the board wrote.

Employees at Hempstead-based Stanan Management Corp., which manages the complex, referred calls to the co-op board president, Irene Smith, who didn't respond to requests for comment.

Arthur Vercelletto, 62, a retired sanitation worker whose ground-floor home at Town N Harbor was flooded by Sandy, said additional charges would be "unaffordable," especially as he expects to spend $15,000 to replace his ruined kitchen, bathroom and other items.

The storm "wiped out a lot of our savings," he said. "It basically wiped out Christmas."

Co-op owners face limits when it comes to federal disaster-aid grants, too. FEMA pays up to $31,900 to cover home repairs and temporary housing for uninsured and underinsured residents of a natural disaster area. Single-family homeowners can use those grants to repair items such as boilers.

But co-ops' boilers and electrical systems are considered property of the complexes, not the residents. Since the complexes are viewed as businesses, they cannot get federal grants -- only loans from the Small Business Administration, according to FEMA.

Federal restrictions

The federal restrictions on insurance and grants are a "glitch" that should be fixed, said Beverly Jones, president of the Long Beach High Rise Association, which includes about 35 co-op and condo complexes.

A change in federal law last year could raise the flood insurance limit from $250,000 to $500,000 for buildings such as co-op complexes, but it is unclear when the higher limits would take effect, a spokeswoman for Rep. Steve Israel (D-Huntington) said.

Israel is among federal legislators pushing FEMA to give co-op complexes grants to fix common property. The lawmakers' requests "have been received and are being reviewed," a FEMA spokesman said in an email.

FEMA needs to change its interpretation of the law, Israel said: "The floods didn't discriminate between co-ops and private homes, but FEMA discriminates between co-ops and private homes. That's just plain wrong."